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Huntsman International has received an amendment that would allow the company to apply any proceeds from the issuance of new bonds directly to amortization payments due on the "A" term loan, rather than use the proceeds to pay down each of the credit's tranches on a pro rata basis. Given the recent amendment some investors believe that the company will pursue a bond deal in the near future. Still, others think that the provision was put in under more long-term consideration.

J.P. Morgan and General Re-New England Asset Management are refinancing a collateralized loan obligation called KZH-Pondview as part of a move to migrate synthetic market value hybrid deals away from the Chase Secured Loan Trust (CSLT) program. Gen-Re, the manager of KZH wants a more flexible vehicle to manage assets. Once KZH is refinanced, Gen-Re plans to sell a significant portion of the original assets and purchase new loans within a deal called Stonewell CLO I, explained Michael Gerity, a director with Fitch Ratings. Stonewell will be a cash-flow arbitrage deal, underwritten by J.P. Morgan. Officials at Gen Re and J.P. Morgan declined comment.

Levels for The Goodyear Tire & Rubber Co. $800 million term loan due 2004 have fallen from the mid 90s into the 88-90 range since the beginning of this year and lenders are finding the restrictive assignment language prohibitive. With a backdrop of banks that have been burned by bad loans, lenders are concerned about the lack of liquidity. "Trades have gotten broken; the borrower wouldn't sign off on the assignments," said a dealer.

Deutsche Bank and Bank One were on their way to filling a $300 million "B" loan for Lennar Corp. last week. The loan will refinance Miami-based Lennar's existing $390 million senior secured "B" piece, locking in a lower rate of LIBOR plus 2%, compared to the previous rate of LIBOR plus 21/ 2%, according to a banker familiar with the credit. Retail syndication of the deal launched Feb. 10. Lennar's debt was upgraded last month by Moody's Investors Service and Standard & Poor's, boosting the home-building company to investment-grade status at BBB-/Baa3. Deutsche Bank and Bank One officials declined to comment.

RBS Greenwich Capital has hired Philip Kearns from Morgan Stanley to head up the new position of volatility trading at the firm, according to Doug Greenig, the firm's co-head of derivatives and agency mortgage-backed securities. Kearns did not return a phone call seeking comment. At RBS GCM, Kearns will be a managing director, the same title he held at Morgan Stanley. At RBS GCM, Kearns will report to Greenig and derivatives group co-head Ed Orenstein.

Republic National Cabinet Corp. (RNCC) has obtained a new credit facility, which backs the company's buyout by equity sponsor the Cypress Group. The play for RNCC comes as the sponsor increases its focus on the building products sector, a growing part of which is the cabinet business, explained David Spalding, v.p. and chair of the Cypress Group. The cabinet business is very fragmented, stated Spalding. "There clearly are ample properties out there," he noted, adding that there are currently no other specific targets.

Salomon Smith Barney is in the market with a $300 million collateralized loan obligation that is called Madison Avenue CDO IV. The manager responsible for the Madison Avenue series is Metropolitan Life Insurance Co., said an analyst. The vehicle joins a pipeline that continues to grow. Only Katonah Capital Management had priced a deal this year as Loan Market Week went to press (LMW, 2/10).

The Altman NYU-Salomon Center defaulted bank loan index started the new year positively, with advancing bank loan facilities outpacing decliners in the 57-facility index, for the first month of 2003. Advances were led by Kmart, Conseco, Federal Mogul and Owens Corning, according to research by Edward Altman, Max L. Heine Professor of Finance at New York University. The defaulted bond index comprised of 121 issues rose by 6.21% in January. Adelphia, National Steel, Big City Radio and NRG Energy made the biggest advances.

AMR Corp. and its primary subsidiary American Airlines have endured a prolonged period of negative cash flow and a lack of significant cost structure reduction. This provides an outlook for continued cash losses, states Moody's Investors Service, which has downgraded AMR's senior implied rating from B1 to B3, as well as AMR and American's senior unsecured ratings from B2 to Caa2. Despite $2.8 billion in cash on its balance sheet, Moody's notes that an increase in lease-adjusted debt, limited access to capital markets and the erosion of the airline's once substantial net worth has significantly reduced its financial flexibility. Earnings have been affected by a slow revenue environment and continued high costs, with EBITDA results negative for the past eight quarters, according to Moody's.

A high-yield buy-side and a sell-side analyst see continued pressure on the bonds of Collins & Aikman in the wake of recent selling pressure. During the two-week period ending last Wednesday, the auto parts manufacturer saw its 10.75% senior notes of '11 (B1/B) drop from par to a bid of 94.

Wachovia Securities is in the market with a $400 million collateralized loan obligation for David L. Babson & Company, according to market sources. The vehicle will be the first one since Babson completed the acquisition of Wachovia's institutional leveraged loan asset management business, First Union Institutional Debt Management (IDM). Portfolio managers John Wheeler and Tom Finke did not return calls for comment. Officials at Wachovia also did not return calls.